The process of applying for a loan, such as a mortgage loan, can be time consuming and costly. Moreover, each loan underwriter may have its own decisioning criteria resulting in nonuniformity in the decision making process both universally and within any particular loan originator.
There are two basic types of processes that have been used by loan processors. These are a manual process of decisioning logic and a partially automated process for decisioning logic.
In the first conventional process, a lending institution has pre-established rules for underwriting product selection. Loan processors handle each application manually. When a loan request is received from a borrower it sits in queue until the loan processor gets to it. The loan processor manually interprets the decisioning logic established by the lending institution to determine the appropriate products to be ordered. The loan processor then generates a request for an automated valuation model (AVM) or a manual product such as a drive by valuation or a full appraisal. When the completed product is returned to the loan processor, usually via fax or electronically, it again sits in queue until it gets to the top of the list. At that point, the product is reviewed against underwriting guidelines. If the lender requires an additional or supplemental product, the lender sends the request back to the vendor and the process repeats.
The manual process can be problematic from an efficiency and accuracy standpoint. Time delays are inherent in the process. Time is wasted every time the loan application or product work sits in queue until the loan processor is able to handle it. Other time delays occur when the borrower is deciding whether or not to order a supplemental or additional product. Since that decision involves a manual review, more time elapses than is necessary.
Moreover, there is not certainty that the loan processor will use or interpret the lending institution's logic correctly. A mistake of this kind may go unchecked, and the product that the lending institution decided should be ordered might not be the product that is actually ordered. A loan processor may intentionally decide to break company policy and choose whichever product seems appropriate at the time, regardless of the lending institutions established rules and risk guidelines. These problems result in wasted time and money, and increase the amount of time between when the application is made and closing of the loan. These problems can also expose the lender to greater risk based on inaccurate underwriting decisions being made.
The second type of process automates some of the decisioning logic. In these types of systems, the lending institution automates a part of the product ordering process. For instance, a loan processor might have the ability to input just a few of the elements of information about the borrower or property into an automated decisioning logic system. This information might include credit tier, geographic location and loan amount. When the loan processor enters this information the system returns the name of a product, or perhaps the names of several products, which then have to be sorted through manually by the loan processor. Thereafter, the loan processor must order the product by sending the information to an AVM vendor or a vendor in the field for a manual product. While the second type of process is more advanced, and decreases the inaccuracies, it still may have problems. Only a few determinates are used to determine the appropriate products to order. This system does not allow for more specific differences between properties that might aid in determining product selection. Also, recent changes to lenders risk policy may not have been received by the underwriting.
The present invention is directed to solving one or more of the problems discussed above, in a novel and simple manner.